…House of Reps query Agip over unpaid penalties, royalties
11 November 2017, Sweetcrude, Abuja – The Petroleum Products Marketing Company (PPMC), a subsidiary of the Nigerian National Petroleum Corporation (NNPC), has insisted that the $205,203,891.09 it received from Duke Oil was for products traded.
The PPMC Managing Director, Mr. Umar Ajiya, who stated this in Abuja yesterday, said the products were traded from January 2016 to September 2017.
Ajiya cited the products to include Fuel Oil (low pour fuel oil) and NAPHTHA (several mixtures of liquid hydrocarbons that are extremely volatile and flammable.)
According to the PPMC boss, as a fall-out of the on-going restructuring of the NNPC, it was agreed that Duke Oil be given the two products to sell on behalf of the corporation, in line with its mandate as an international trading company, as well as its wholly-owned subsidiary.
He said, “The current operating model allows the PPMC to pass the volumes to Duke Oil and remit to the PPMC, in both the value of product invoiced and administrative charge.”
Ajiya stressed that the arrangement was not intended to create a monopoly, but empower the firm to function properly, adding that there was no money missing anywhere.
He submitted that Duke Oil before now was not operating like it should as an international trading company.
He denied the allegation by the Chairman of the House of Representatives ad hoc committee, Rep. Jarigbe Agom Jarigbe, that revenue leaked in the oil sector during the period under review.
While requesting more documents to support the presentation summited to the committee, he denied that Duke Oil did not cooperate with PPMC in making their remittances.
Meanwhile, the House of Representatives Ad-hoc Committee probing N6 trillion revenue leakages in the oil sector, yesterday, queried Agip Nigeria Oil Limited over alleged unremitted royalties and penalties arising from gas flaring.
The investigative panel also gave the company till November 13, to submit all existing documents as proof of reconciled transactions between it and the Department of Petroleum Resources, DPR, ahead of its investigative hearing on November 15.
This came to the fore at an interactive session between the panel and the company during which officials of Agip claimed that all outstanding liabilities had been cleared via periodic reconciliation with the regulator.
Mr. Carlo Santopadre, responding to queries, stated that based on the information the company got, they were at the House to provide responses to issues of unremitted royalties and unpaid penalties.
He, however, suggested that with regard to a single item, it was up to the committee to decide whether the company sets up a technical committee to reconcile all the differences and get back to it, adding that “the permission will afford us the opportunity to address all existing gray areas.”
Mr. Oluwole Agbede, who is the Tax Manager at Agip, offering further clarification, said: “We usually have annual reconciliation exercise with the DPR where gray areas are ironed out and the DPR has never come back to us that what we submitted were not accurate.”
On the issue of Production Sharing Contract, PSC, he said the company has remitted N169 million, adding that “as for the issue of royalty that is causing differences, we don’t know where that is coming from, but we have our own accurate figures rightly remitted into the federation account.
Asked if Agip is not supposed to pay a royalty, he said Agip does pay but computes its royalties and remits same into government account provided by the regulator.
He added that the operators check the numbers with DPR which they compute and are very well known to the DPR, saying: “If there is any catch-up payment, we reconcile and remit, and there has been no issue with that ever since.”
A member of the panel, Mr. James Faleke, at this point asked: “So what you are telling us is that government should take your figures and then agree that it is the correct thing?”
While responding that it was not the case, the Tax Manager informed the panel that they took products last in 2016 and are still making payments with reconciliation going on.
The Committee Chairman, Rep Jarigbe Agom Jarigbe, told the officials: “What we look at is the volume of products taken by you as there is computation done in this regard, and the agency that does this is the DPR.”
Jarigbe asked if they have meters for gas flared, the Mr. Barry Nwibani, General Manager, Nigeria Content Development at Agip said there is no gas flared at the wellheads, but at the flow stations, assuring the panel of making documents available to that effect.
Jarigbe ruled that “Agip must provide its own evidence of remittances and at the end, we will look at what you have and what DPR has, and then involve experts for on-the-spot assessment to advise the House appropriately”.
He reminded the company that the hearing is on November 15 and members are going to be working with facts, demanding that all necessary documents be submitted to the secretariat.